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BC Hydro has dramatically increased the cost of its Northwest Transmission Line, adding more than $150 million to the price tag.

The new figure is $736 million, a massive jump over a price range released just this spring of $561 million to $617 million.

BC Hydro has steadily increased the estimated cost of the 344-km power line, which will run north of Terrace, since an initial figure of $404 million was suggested when the Crown corporation first began planning construction in the latter part of the last decade.

Bruce Barrett, BC Hydro vice-president of project and program delivery, said a large portion of the additional costs come from difficulties in clearing the power line’s right of way and in building roads to the right of way.

“Drilling and blasting alone is 10 times more than original estimates,” Barrett said, while describing the challenge of going through terrain that is more difficult than anticipated.

Contractors are building 205 km of new road and improving 280 km of existing roads to provide access to more than 1,100 sites where power line structures are being installed.

The line itself will be approximately 344 km long, stretching north from BC Hydro’s Skeena Substation south of Terrace to end at Bob Quinn on Hwy 37 North.

Barrett also acknowledged time pressures in completing the line by next spring to meet contractual obligations to the power line’s first two major customers: Imperial Metals, which needs power to run its Red Chris copper and gold mine, which is now under construction; and AltaGas, which is building three run-of-river hydro projects to feed power into the line.

Red Chris is scheduled for completion next spring, while AltaGas has targeted the same time period to finish the largest of its three projects. That’s meant working through the past two winters, Barrett said, and not always under ideal conditions.

At the same time, Barrett said BC Hydro’s costs have increased because of the high level of economic activity in the region.

Large scale construction projects — including Rio Tinto Alcan’s rebuilding of its Kitimat aluminum smelter and work on potential liquefied natural gas projects — have created a shortage of people and equipment, causing prices to rise.

“We’ve had to bring in people and equipment from all over,” said Barrett. “BC Hydro has not built a project of this size in a remote area for some time.”

The new transmission line figure of $736 million is part of BC Hydro’s adjusted service plan costing for its operations, which will be released Friday as part of the provincial budget.

BC Hydro’s board has already approved the new cost figure and has tacked on an additional $10 million as a reserve.

In previous cost estimates, BC Hydro said figures were subject to a variance of plus-or-minus 10 per cent.

Despite the large increase, Barrett said the project has provided an economic jolt to the northwest, particularly with employment and business opportunities going to First Nations people and companies.

Calling First Nations hiring and business arrangements “unprecedented” in BC Hydro history, Barrett said the economic value to First Nations is more than $100 million.

He declined to release specific figures for the eight First Nations and the Nisga’a Lisims Government, who have benefited from the transmission line crossing their traditional territories and, in the case of the Nisga’a, over its core lands.

Clearing contracts have primarily gone to First Nations based on the transmission line route crossing their traditional territory and to the Nisga’a Nation for the route that crosses Nisga’a land.

Additional costs have also been added to the budget, which wasn’t the case before. Those include impact benefit agreements for First Nations and for the Nisga’a Lisims Government, as well as the cost of replacing fish and wildlife habitat affected by construction, Barrett said.

BC Hydro also increased the size of the cables through which the power will flow once the line is energized next spring, at another addition cost.

“What this will do is reduce the power losses (through the cables). The line will now have more capacity,” Barrett said.

That, in turn, means BC Hydro will have the ability to sell more power to customers and also to take in more power from producers, Barrett added.

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BC Hydro power line cost of Northwest Transmission Line soars

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